LATEST: Taylor Wimpey agrees to free leaseholders from ground rent nightmare

Taylor Wimpey has promised to free leaseholders from costly contracts that cause ground rents to double in price every 10 years.

Following a Competition and Markets Authority (CMA) investigation, the housebuilder has removed terms in leasehold contracts which result in leaseholders struggling to sell or get a mortgage on their home. Instead, ground rents will remain at the amount charged when they first bought their home.

Taylor Wimpey will also remove terms which had originally been ground rent doubling clauses but were later converted to increase in line with the Retail Prices Index.

financial contribution

In cases where Taylor Wimpey has sold the freehold and can’t remove clauses itself, it will help to get them removed at no cost to leaseholders by liaising with the current freeholder and making a financial contribution. The firm has also confirmed that it has stopped selling leasehold properties with doubling ground rent clauses.

CMA chief executive Andrea Coscelli says the contracts are totally unwarranted obligations that lead to people being trapped in their homes. “I hope the news they will no longer be bound into these terms will bring them some cheer as we head into Christmas,” she says.

“Other developers and freehold investors should now do the right thing for homeowners and remove these problematic clauses from their contracts. If they refuse, we stand ready to step in and take further action – through the courts if necessary.”

The CMA launched enforcement action against four housing developers in September 2020: Countryside and Taylor Wimpey, for using possibly unfair contract terms, and Barratt Developments and Persimmon Homes over the possible mis-selling of leasehold homes.

It has secured commitments from Countryside and Persimmon, as well as from an investor in freeholds, Aviva, but the investigation into Barratt Developments is ongoing.